2019 was another year of ups and downs for the re/insurance world in general and Bermuda in particular.
As 2020 approaches, we decided to take one last look at the year that has almost ended. We asked our readers the following question: ‘As 2019 comes to an end, what has been the most important event to affect the Bermuda re/insurance market, and why?’.
We gave our readers a choice between five different options: the 2019 hurricane season, the 2019 Californian wildfire season, Brexit, continuing mergers and acquisitions (M&A) activity and Bermuda’s fintech push. Respondents were allowed to choose multiple answers to this question.
The largest number of votes were cast for the 2019 Californian wildfire season, by 64 percent of respondents. This has been the third successive highly active fire season in the US state, which ravaged wide areas, some of which are still burning. The year was not as bad as the 2018 Californian wildfire season but it was still severe enough to make many people worry about future developments.
Writing anonymously, one reader said: “My opinion is biased, as California wildfire is my company's peak peril. That said, this is a new development. Wildfire was an underappreciated peril, by both primary and reinsurance organisations. Wildfire has resulted in a lot of disruption with our Bermuda markets.”
The second largest number of votes was cast for continuing M&A activity, which was chosen by 55 percent of respondents. It was a busy year on this front: Arch Capital Group completed its acquisition of Barbican Group Holdings, RenRe bought TMR, Artex acquired Horseshoe and Hamilton Insurance Group bought Pembroke Managing Agency.
Commenting on the M&A situation industry veteran Andrew Barile said: “The market will see continuation of growth by acquisition,” adding that it would be a “good exit strategy to take the money and run”.
Third on the list of worrying topics for the market was the 2019 hurricane season, which was selected by 36 percent of those surveyed. There were 18 tropical storms, of which six developed into hurricanes, three of which were major hurricanes. Hurricane Dorian, which formed in August and dissipated in September, was the worst of these.
One of the most powerful storms ever recorded in the Atlantic, Dorian caused widespread damage to the Northern Bahamas and briefly threatened Florida, before moving off parallel to the US coastline. Bermuda was also impacted by Hurricane Humberto in September, but was not badly hit.
The fourth largest number of votes was cast for Bermuda’s ongoing push to promote fintech on the Island. In October Premier David Burt announced that Bermuda will begin accepting 1:1 US dollar-backed digital currencies for the payment of government taxes, fees and services.
Burt spoke at a number of events this year, on Bermuda and also in the US, about how the Island is open for increasing amounts of fintech business.
Brexit was picked by no-one. The impact of what has been a fiercely controversial referendum decision will not be felt for some time, not least because of the political confusion it has stirred up.
Bermuda, Reinsurance, Catastrophe, Wildfires, Hurricanes, Brexit, Mergers & Acquisitions, Fintech